“Home Sweet Home”: The Impact of Urban Growth on Oregon Real Estate Disclosures | Miller Nash LLP

With its lush landscapes and relative affordability, Oregon is fast becoming a desirable place to live. During the pandemic, dense and expensive cities like San Francisco, Los Angeles, and Seattle are seeing an exodus of residents as many big city dwellers flock to other places to work remotely.

As a result, buying and selling real estate in Oregon has skyrocketed in recent years. This interest, combined with rapid development to accommodate the growing population, has resulted in Oregon’s neighborhoods constantly expanding and changing. This also means that parties to real estate transactions must take special care in how they complete and review real estate disclosure forms.

Oregon law requires a seller to disclose to the buyer any “material defects” known to the seller that would not be readily apparent to a buyer. These material defects are disclosed in a form called the Seller’s Property Disclosure Statement and require the seller to disclose personal knowledge of the property, which includes specific information about features such as water sources, sewer systems, insulation, leaks, electrical systems, plumbing, drainage and more . However, the otherwise uncomplicated questionnaire ends with a tricky collective question: “Are there other material defects that affect this property or its value and that a prospective buyer should be aware of?”

This last question poses a significant challenge as it requires the seller to provide information not only about the property itself but also about the potential Outside Factors that can affect the value of the property. For example, in developing neighborhoods experiencing significant growth, there could be future plans to add a noisy freeway, alter school district boundary lines, or add a large apartment complex to a previously sleepy area, which could significantly increase pedestrian and automobile traffic. Although neighborhoods inevitably evolve over time, many sales disputes can be avoided simply by ensuring that information is disclosed about future developments that may affect the attractiveness and value of the property. To that end, sellers should stay on the over-disclosure page and add information about upcoming neighborhood changes. Given the subjectivity of what constitutes a “material deficiency”, disclosures should arguably include positive developments. For example, some might see the installation of a church on the street as a positive attribute and others might not.

But the responsibility does not only lie with the sellers. Buyers should also do their own due diligence by researching a neighborhood before rushing into a sale. To avoid any unwelcome surprises, buyers should request and review public records that could provide insight into future developments in the neighborhood. These public records include: local building permits, zoning applications, zoning restrictions, and other planning activities that may indicate future construction, building heights, and commercial use. Most importantly, these public records can raise buyer expectations and help them find their home sweet home.

Taking these steps can help avoid disputes later: buyers feel informed about their purchase, and sellers reduce their risk of complaints. Ultimately a win-win situation.

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